Need for entrepreneurship in India

Entrepreneurship and innovation are critical for the growth of any economy, in an increasingly competitive world. The Industrial Revolution, the rise of the US to its preeminent state ,the recovery of Germany post-World War, and, more recently, Israel’s status of a developed economy have all been driven by entrepreneurship and innovation.

They become even more critical for India as its demographic dividend can only be realized with rapid creation of employment and income generation opportunities.Global experience shows that, apart from creating wealth and boosting the economy, new businesses also create disproportionately more jobs than established ones. According to Kauffman Foundation, a well-regarded research body in the US, “On an average, existing firms are net job destroyers; losing 1 million jobs net combined every year. By contrast, new, less than one year old firms added an average of 3 million jobs in total.Noted management scholar, Peter Drucker attributed the surge in employment in the US between 1965 and 1985, that is, the creation of 40mn new jobs in the US, solely to entrepreneurs.

Israel has very little natural resources but is considered a part of the developed world, driven by the strength of its entrepreneurs. Historically, India was considered an innovation driven country, at the forefront of trade,
mathematics, astronomy and philosophy. Not surprisingly we accounted for almost 25 % of world GDP barely 300 odd years ago, arguably the largest in the world. Colonisation and missing the Industrial Revolution brought us down to 2% of global GDP by 1947.By the beginning of 1990’s, with virtual bankruptcy facing the country, India’s share of world
GDP was down to 0.2.

However, economic liberalisation initiated in 1991 appears to have revived the old DNA.Business and industry rebounded. The stagnant and sluggish early single digit rate of growth zoomed to almost double digits. The last two decades have given us a glimpse of what entrepreneurship can do for the country. In barely 20 years, the Indian IT services industry, driven by first generation, middle class entrepreneurs, has grown from its early stages to around Rs 4.5 lakh crore ($88 billion), creating 117 lakh (11.7 million) jobs- 28 lakh (2.8 million) directly and additional 89 lakh (8.9 million) indirectly, and accounting 25% of our exports, and 7.5% of our GDP10.

The telecom industry is another shining example where a first generation entrepreneur is now India’s largest and amongst the world’s leading telecom service provider (by subscriber base) with over 200 million subscribers.

Mohit Bansal@ISM
Mohit Bansal(23) is B.Tech in Electronics and Communication Engineering from Indian School of Mines, Dhanbad, India. He has interest in business and entrepreneurship and has published couple of research articles. He is also associated with various NGOs. He is with Techaloo when it was just in concept stage. The Techaloo site was not existing even then.
Currently Mohit is working with Mu Sigma as a Business Analyst Profile.